Valeo Japan Co., Ltd. (Mr. Ryuji Saito)

Valeo Japan Co., Ltd. is the Japanese arm of the Valeo Group, a French independent auto parts manufacturer and conducts design, development, production and sales of automotive parts, systems and modules. We interviewed Mr. Ryuji Saito, the Representative Director and President of Valeo Japan to find out about the company’s business situation in Japan.

Valeo is an independent auto parts manufacturer and global supplier, based in France with 78,600 employees in 29 countries around the world. We interviewed Mr. Ryuji Saito, the Representative Director and President of Valeo Japan Co., Ltd., the Japanese arm of the Group, to find out about its view on business in Japan.

Current business situation in Japan

We have been successfully expanding our business since our establishment as a Japanese branch in 1985. Two companies in the Group, namely Valeo Japan Co., Ltd. and Valeo Unisia Transmissions. KK, operate in Japan with nine production sites, three R&D centers and approximately 2,800 employees.

Currently, the automobile production volume of Japanese automobile manufacturers accounts for approximately 30% of the global automobile production volume. On the other hand, within Valeo, the volume of sales to Japanese automobile manufacturers accounts for only about 20% of the total sales volume, which means that we have a small market share, so we believe we have room for further growth.

The strengths of the Valeo Group

First of all, as an independent supplier, we can provide customer-driven services regardless of which group they belong to. We have been working on development jointly with a number of auto manufacturers, based on the excellent technological and research & development capabilities that we have accumulated. We can put our customers first when it comes to developing and providing new technologies no matter which group they belong to. In order for us to develop technologies one step ahead of our competitors, Valeo invests over 10% of its OEM sales in research and development and this is a standard which is not low at all.

Another strength is our global product supply system. Currently in the auto industry, modularization of components is becoming common, and suppliers need to build a system that enables global production and supply of their products. In that respect, it can be said that we can meet these needs as a supplier as we have 123 production sites in 29 countries around the world.

What are benefits in operating business in Japan?

One of the reasons why we operate in Japan is the existence of Japanese auto manufacturers. Many major auto manufacturers have a global production system and have shifted their production sites abroad, but many of the Japanese auto manufacturers are still working on the research and development of core units, which are fundamental in their expanding businesses overseas, in Japan. Recently, there is a growing momentum for the Japanese auto manufacturers to “adopt products and technologies from any group as long as they are good,” so we believe that this will bring more business opportunities to us.

Moreover, we are keeping an eye on innovations developed in Japan as well. These innovations, such as technologies related to hybrid vehicles, mini vehicles and fuel cell vehicles (FCV) that are expected to become popular globally, have a significant influence on the entire global market. In terms of mini vehicles with their growing need in the ASEAN member states and India, as a result of localization based on the technologies and products developed in Japan, Japanese auto manufacturers have a strong presence in the market. Our R&D centers in Japan are working on the research and development of technologies that will contribute to the “reduction of carbon dioxide emissions” and “intuitive driving” in order to meet needs of auto manufacturers.

Are there any examples of products/services developed in Japan and sold in the markets of other countries?

Within the Group, there are internal specialization regarding areas of research and development. For example, the European market is taking the lead in automotive sensors, one of Valeo’s core products, so automotive sensors developed in Europe are sold in Japan. On the other hand, we work on the research and development of products for vehicle interior air quality in Japan and sell them in the global market because Japanese consumers are more sensitive to vehicle interior air quality. In fact, a product called “Wasabi d’air” which purifies air from air conditioners with an antimicrobial constituent in wasabi was developed in Japan and is sold in the markets of many other countries.

How about the roles and position of the Japanese base within the Group?

Valeo’s business pillars are the four Business Groups - Comfort & Driving Assistance Systems, Powertrain Systems, Thermal Systems and Visibility Systems. For the Comfort & Driving Assistance Systems and Thermal Systems, the Japanese sites are responsible for administering countries in Asia, excluding China.

Business in regional cities in Japan

We allocated resources based on our policy of developing technologies at locations closer to our customers, and as a result, we currently have 16 sites across Japan including the regional bases of companies with which we integrated in the process of our business expansion. Recently, in order to enhance our major customer support system, we moved and expanded our office in Utsunomiya, Tochigi and created a new “Utsunomiya Office.”

Future business development

Valeo considers Japan one of the most important markets. As a way to commit to the Japanese market on a long-term basis, we have started hiring new graduates in Japan and joined the Japan Federation of Economic Organizations and the Association of Corporate Executives.

Furthermore, innovation in Japan will continue to be one of our major interests. Valeo wants to actively increase investment in this area for our research and development activities and to expand our business in Japan.